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Duluth business finds loophole to get around flavored tobacco sales restrictions

DULUTH, MN — At least one Duluth business has found a workaround when it comes to the city’s restrictions on the sale of flavored tobacco products.

It was supposed to prevent certain businesses from selling flavored tobacco products to kids in Duluth.

But a business has found a loophole of sorts in the nearly year-old ordinance.

“I think this is a poor outcome that advocates of this policy would rather not see,” said Duluth city council president Noah Hobbs.

With a 7-2 vote in February of 2018, the City Council moved the sale of flavored tobacco out of convenience and grocery stores, and into smoke shops, leading to a change in how those stores do business.

City clerk Chelsea Helmer says the Holiday Station store on Central Ave., in  Duluth’s Spirit Valley neighborhood is establishing its own smoke shop, within the confines of their already established store.

“Essentially what they’re doing is creating a separate retail establishment, which is allowable under the current city code, in order to sell flavored tobacco products,” said Helmer.

Holiday wouldn’t let us in the store to shoot video, but inside is a section that is totally sectioned off. It’s about 10 feet by 10 feet with its own entrance.

As long as revenue from that area is at least 90% tobacco sales, they meet the city ordinance.

“Holiday Stations has looked at the current law and determined that it’s in their interest as a business to create this separate retail establishment,” said Helmer.

Hobbs voted against the ordinance, saying it unfairly shifted business.

“This is a byproduct of a well-intentioned policy with poor implementation, and somewhat expected outcomes,” he said.

While Hobbs isn’t pro-tobacco, he does think this is a sign of things to come.

“I would expect that other entities would take advantage of this change in the marketplace, and if they see a profit to be made in it, I think they will,” said Hobbs, saying he thinks other businesses will adopt a similar strategy as Holiday.

Whether the city council will revisit the issue to prohibit the workaround remains to be seen.

City councilor Zack Filipovich, who co-sponsored the ordinance with Barb Russ did release a statement regarding that matter.

“They can do what they want while following the law, but I would hope and expect that all businesses want the best for our citizens and not want to increase access to tobacco products that are marketed to kids,” he said.

Rick Johnson, Holiday Stationstores’ Vice President of Operations issued the following statement in response to our comment request:

“When Holiday opened its first Tobacco Shop in Duluth, Minnesota last week, it did so only after obtaining city approval and licensing.  This was not a workaround or a loophole,  rather the shop was created in complete compliance and support of the Duluth City Council’s ordinance moving the sale of flavored tobacco out of convenience and grocery stores into ‘smoke shops.’ At Holiday, we fully recognize the need to prevent young people from using tobacco products, and we take great pride in our stellar record concerning the sale of age-restricted products. Our new tobacco shops will card everyone 100% of the time, and we will not take any chances of selling tobacco to those under the legal age.”

*Editors note:  This story previously said we reached out to the two city councilors who proposed the ordinance, Zack Filipovich and Barb Russ. It has been updated to include Filippvoch’s statement.  In addition, this story previously said we reached out to Holiday, who had not responded at the time to our comment request.  We have now received word from Holiday, and included it in our story.

Reporter Anthony Matt

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